5 Tips for getting an RV Loan

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RV on road (Photo: @sashapritchard via Twenty20)
An RV has the power to turn any place into a vacation destination. Just pack up the kids, a few changes of clothes, and some snacks, and the open road is yours. If you’re thinking of purchasing a recreational vehicle, you’re probably wondering how to secure the best RV loan rates. When it comes to financing your RV, here are some things to keep in mind.

1. Shop around for a lender

RV dealerships offer financing, but if you’re looking for the lowest rate, you’ll probably want to shop around. Credit unions often have lower interest rates and they are also more likely to offer you a loan if you have a bad credit score; however, they will still take your score into account and may not offer you a loan if they believe you are liable not to pay it back.
During your search, also check banks and online lenders. If you have a good credit score, you will have many RV financing options.

2. Determine your down payment

Most lenders will require a 10-20% down payment for an RV purchase. That means if you buy an RV for $100,000, you will have to put down between $10,000 - $20,000. Knowing this ahead of time will allow you to save up for the purchase. Keep in mind, sometimes you can find a lender who requires little or no down payment, but you will most likely pay higher interest rates.

3. Estimate your insurance costs

Like your car and home, you have to insure your RV. Depending on the value, the estimated annual miles driven, and home location, your insurance costs can vary drastically. Even so, insurance is a very important factor when calculating what you can afford.
You cannot legally drive your RV without insurance, and lenders won’t approve your loan without it either. A tip for getting a loan for an RV is to factor in insurance, maintenance, and fuel costs when determining your monthly budget.

4. Negotiate a purchase price

Just because it’s printed on a sticker, doesn’t mean it’s the final price. Try negotiating to get the lowest price. Before tacking on pricey upgrades and features to your new RV, think about how necessary they are and if you are really going to use them enough to justify the cost. This is an area where dealers make a large profit, so they may have more room to negotiate and include the upgrade at no additional cost. Also, see if you can get a few years of regular maintenance included to save on upkeep costs.

5. Determine your loan term

Most RV loans offer a financing term of 10-15 years. You have the option to extend the loan term up to 20 years, but it will come at a price. The longer you finance your RV, the higher the interest costs will be. That means adding a few extra dollars to your monthly payment may amount to thousands in savings down the road — literally.
Purchasing an RV can present some challenges, but being prepared ahead of time can alleviate some of that stress so you can concentrate on enjoying your new vehicle. Happy driving!